Council leaders have proposed giving households micro-chipped wheelie bins as part of the controversial pay-as-you-throw rubbish scheme.

Under plans suggested by the Local Government Association, micro-chipped wheelie bins or pre-paid refuse sacks could be used to measure the amount of rubbish each household throws out.The LGA said pay-as-you-throw arrangements would cut waste and encourage more recycling while insisting the proposals would not be a stealth tax to raise extra cash for councils.

It outlined three different schemes which councils in England could use to cut the amount of rubbish residents throw away.

One suggestion was for householders buy different sized pre-paid rubbish sacks - a scheme which could be used in urban areas where wheelie bins are not always practical.

The special wheelie bins would allow the amount of rubbish to be weighed as it was loaded on to the refuse truck.

Residents would then be billed for the amount of waste they created.

The third option for councils would be a scheme in which householders choose the size of the wheelie bin they use, based on how much rubbish they think they will generate, and are charged accordingly.

The LGA said any scheme a council introduced would be dependent on local circumstances and have to be supported by residents.

But the association warned taxpayers would bear the brunt of fines of up to £3 billion which will be imposed on councils over the next four years if they did not meet European targets for reducing the amount of waste which ends up in landfill.

And it said a survey carried out by Ipsos Mori found 38 per cent of people strongly supported a system in which they paid a reduced council tax rate and were charged directly for the amount of rubbish they produced. A further 26 per cent "tend to support" the proposals, the poll found.

Cllr Paul Bettison, chairman of the LGA's environment board said: "For decades people have been used to throwing their rubbish away without worrying about the consequences. Those days are over.

"There is now strong public support for schemes that reward people for recycling and councils should be given the power to introduce these where it is appropriate to do so."

But Eric Pickles, the shadow communities secretary, insisted that the Government did not plan to reduce council tax when pay-as-you-throw schemes are introduced, and said that householders will end up paying more.

"The Government's half-baked plans wouldn't add up to a green measure - they are simply another stealth tax," he said.

The schemes would require government legislation before they could be implemented and could be introduced by around 2009/2010, the LGA said.

The latest plans to boost recycling and cut waste come after criticism earlier this year of councils switching to "alternate" collections, in which rubbish is picked up on a fortnightly basis alternating with recycling collections.

The Government defended the alternate collections against concerns that they encourage rats and disease and said councils which had introduced them had much higher recycling rates.

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